Additional Discretionary Institution Considerations – U.S. Manufacturing and Small Business Use of AIA Proceedings

The memorandum adds three factors the Director will weigh when deciding whether to institute IPR and PGR: U.S. manufacture of the accused products, U.S. manufacture of the patent owner's competing products, and whether the petitioner is a small business that has been sued on the patent at issue. It encourages parties to address these facts in their discretionary briefing, and it applies to all IPRs and PGRs in which the due date for the patent owner discretionary brief has not yet elapsed. Petitioners should now expect discretionary briefing on where the accused products, and their components, are made, and on any small-business status. Small businesses sued for infringement are encouraged to identify themselves. Patent owners may point to the petitioner's lack of U.S. manufacturing or investment, and may cite their own U.S. manufacture of competing products. The memorandum rests on the Director's duty under 35 U.S.C. §§ 316(b) and 326(b) to consider the effect of institution standards on the economy, the integrity of the patent system, the efficient administration of the Office, and the Office's ability to timely complete proceedings. It also points to 13 C.F.R. §§ 121.801 through 121.805 and 37 C.F.R. § 1.27(a) for small-business status. WHAT IT DOES: Says the Director will consider, in deciding whether to institute IPR and PGR: (1) the extent to which products accused in a parallel proceeding are manufactured in the U.S. or relate to investments in American manufacturing operations; (2) the extent to which the patent owner's competing products that it makes, sells or licenses are manufactured in the U.S.; and (3) whether the petitioner is a small business that has been sued for infringement of the patent at issue. It encourages parties to identify relevant facts in discretionary briefing and encourages small-business petitioners to identify themselves. Manufacturing is assessed by looking at final assembly, U.S.-made components, and whether U.S.-made products are sent abroad for further processing. For method claims, the relevant product is the device used to carry out the method. Small-business status will turn on all relevant facts the parties raise, including the SBA size standards and 37 C.F.R. § 1.27(a). WHO AND WHEN: Applies to all IPRs and PGRs in which the due date for a patent owner discretionary brief has not yet elapsed. The memorandum is dated March 11, 2026 and is addressed to all PTAB users. It states no separate effective date. KEY QUOTE: "This Memorandum applies to all IPRs and PGRs in which the due date for a patent owner discretionaiy brief has not yet elapsed." (p. 3) EARLIER GUIDANCE AFFECTED: None identified in the document. PRACTICE TIP: In discretionary briefing, put in concrete facts on where the accused products and their components are made, any U.S. manufacturing investment, and the patent owner's U.S. production of competing products. Small-business petitioners should state their status and support it under the cited size standards. Check whether your patent owner discretionary brief due date has already passed.